The Shanghai free trade zone, approved in August to boost competitiveness, will also lift a 2012 block on The New York Times, the South China Morning Post said, citing unnamed government sources.

"In order to welcome foreign companies to invest and to let foreigners live and work happily in the free-trade zone, we must think about how we can make them feel like at home," it quoted a source as saying.

"If they can't get onto Facebook or read The New York Times, they may naturally wonder how special the free-trade zone is compared with the rest of China."

The zone, set in China's commercial capital, would also allow foreign telecommunications firms to compete against state-owned counterparts in bidding for licenses, the Post said.

China's censorship authorities tightly control online content for fear of political or social unrest that could challenge the ruling Communist Party's grip on power.

Authorities in recent years banned the popular social media sites Facebook and Twitter, which were instrumental in the wave of uprisings that swept the Middle East and North Africa from late 2010 in what became known as the Arab Spring.

Last year authorities blocked The New York Times after it cited financial records showing relatives of former Chinese Premier Wen Jiabao had controlled assets worth at least $2.7 billion -- a report China branded a smear.

In recent months authorities have ramped up already strict censoring of domestic social media sites such as the popular microblog service Sina Weibo.

They have detained hundreds of people for spreading "rumours" online, and warned high-profile bloggers with millions of followers to post more positive comments.

The Supreme Court said this month that Internet users could face three years in jail if "slanderous" information spread online is viewed more than 5,000 times or forwarded more than 500 times.

The Shanghai free trade zone was approved by the State Council, or China's cabinet, to try to establish a true international trade and finance centre, and push reforms of the world's second largest economy.

A draft plan seen by AFP showed that the zone will remove controls on China's yuan currency -- a key obstacle in Shanghai's ability to compete with global hubs such as Hong Kong, London and New York.

An ambitious studio complex built by China's richest man will be a major boost for the country's film industry but experts say it needs more than sprawling grounds to rival Hollywood.

Global A-listers Nicole Kidman, Leonardo DiCaprio and Catherine Zeta-Jones showed up on Sunday for the lavish event to showcase plans for the Oriental Movie Metropolis, set to span 376 hectares, in the eastern port city of Qingdao.

The 50 billion yuan ($8.3 billion) complex will house 20 studios that will turn out 100 films a year, including 30 foreign productions.

Backing the project is China's richest person, Wang Jianlin, whose conglomerate Wanda last year acquired US cinema chain AMC Entertainment to become the world's largest cinema operator.

"I think it's exciting to see Wanda build these facilities. But it takes much more than hard assets and facilities to do good movies," said Robert Cain, who has done business in China since 1987 and is now a partner in a film co-production company.

"There is a huge gap in the skills which remain between China's film industry and Hollywood."

While Beijing is aware of the importance of using its "soft power" overseas, the state tightly controls the film industry and cuts any subject matter that might be politically sensitive.

Rarely do domestic movies attract an international audience -- and even Chinese moviegoers have shown lukewarm interest in local offerings.

Although a quota of just 34 foreign films can be shown in the country each year, these made up more than half of Chinese box office sales last year.

However, the first half of 2013 showed a reversal. Ticket sales for Chinese films more than doubled those of the same period the year before, surpassing foreign films for the first time in five years.

At the end of June the Chinese movie "Tiny Times", which depicted the daily life of wealthy Chinese youth, defied expectations by overtaking Hollywood blockbuster "Man of Steel".

But its international success remains in question.

Chinese movies deserve attention if only because the number of moviegoers is so large, said Hawk Koch, a former president of the Academy of Motion Picture Arts and Sciences, which runs the Oscar awards.

"Given the box office in China, the fact that China is going to become the number one box office in the world, we have to pay attention," he said.

But to merit more critical attention, he added, the sector needs "more personal movies that touch people".

"China is kind of known for kung fu movies and action movies, and I think that, in order to be known seriously in the world, they would have to make more intimate movies," he said.

The US film industry would be a huge star to try to outshine, he warned.

"I don't know if anyone will ever compete with Hollywood, because that's been the centre for so many years."

In an effort to grow, some Chinese studios have partnered with foreign counterparts in co-productions, as was the case in the Robert Downey Jr. blockbuster "Iron Man 3".

The Chinese firm Dreams of Dragon Pictures took part in producing the internationally successful "Cloud Atlas", starring Tom Hanks and Halle Berry.

The Movie Metropolis complex is set to begin operations in 2016 and will also feature a 3,000-seat theatre and a shopping centre with seven hotels.

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